An arbitration clause in a dealership agreement survives the termination of the agreement and covers disputes arising out of or in relation to the agreement, including disputes about the validity of the termination.

JUDGMENT - Deshpande M.S. J. - This revision application by the original defendants is directed against the orders passed by the two courts below refusing to stay the suit under section 34 of the Indian Arbitration Act.

2. The respondent Kesarsingh, who claims to be an ex-serviceman, was given a dealership by the Indian Oil Corporation on the basis of the discharge certificate from the Army authorities to the effect that he was discharged owing to his illness and his character was good Later the Indian Oil Corporation found that the Discharge certificate had been tampered with because Kesarsingh had changed in the column of character on discharge, the remark from 'fair' to 'good' and the Cause of discharge from 'inefficiency' to 'Sickness'. A termination letter was issued on March, 26, 1983, referring to the changes made in the discharge certificate and also to the position that he could not claim to be an ex-serviceman because his discharge was on the ground of inefficiency. Thereafter Kesarsingh filed a writ petition in this Court and also obtained an exparte stay on 8-4-1983. Later after the original record was produced by the Army authorities in this Court on 15-7-1983, the ex parte stay granted was vacated ' and the writ petition was withdrawn on July 22,1983. Kesarsingh thereafter brought Regular Civil Suit No. 557 of 1983 in the Court of the Civil Judge, Junior Division, Akola for a declaration that his right under the dealership agreement subsisted and the notice of termination issued by the Indian Oil Corporation was illegal and inoperative and for an injunction restraining the Indian Oil Corporation from terminating the agreement on the ground mentioned in the notice. The Indian Oil Corporation put in an appearance before the Trial Court and filed an application under section 34, Indian Arbitration Act contending that in view of the Arbitration clause contained in the dealership agreement, the matter should be referred for arbitration.

3. The learned Trial Judge after considering the arguments advanced by the parties was of the view that the dispute which has been raised by the Indian Oil Corporation was not covered by the Arbitration agreement. He found that the allegation of bias which was made by Kesarsingh would not help him in view of the legal position, which was placed before him. He also found that it was necessary to consider the vital question about legality and scope of the word 'Ex-serviceman' and though the defendants were ready and willing to go for arbitration under the Arbitration Clause, in view of his other findings, stay could not be granted. The learned Joint Judge did not affirm the finding of the Trial court that the dispute was not covered by the arbitration agreement but expressed no opinion on that point. In the view of the learned Joint Judge, the suit in question involved determination of complicated questions and, therefore, that was a matter which ought not to be referred to arbitration. He did not record any finding on the contention regarding bias which had been raised on behalf of Kesarsingh and dismissed the appeal.

4. Feeling aggrieved by the order passed by the two courts below, the defendants Indian Oil Corporation have challenged those Orders by this revision applcation.

5. The first point which was raised on behalf of the respondent was that since the dealership agreement which contains the arbitration clause, was itself sought to be terminated by the defendants, the arbitration clause would not survive. Clause 21 of the Dealership agreement provided as follows:-

“ This agreement may be terminated without assigning any reason whatsoever by either party upon giving to the other not less than thirty days' notice in writing to expire at any time of the intention to terminate it and upon the expiration of any such notice the agreement shall stand automatically, cancelled and revoked but without prejudice to the rights of either party against the other in respect of any matter or thing an

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